Determining how much a developer can afford to pay for developable land can be a daunting task. Employing comparable sales data is one technique often used for deciding the value of a piece of land. However, this approach ignores critical project details and can be unreliable for determining project viability. Ultimately, it can cause the failure of what could have been a successful undertaking. A more reliable and comprehensive technique is residual land valuation. This technique—used by development professionals, corporations, and appraisers alike—determines project viability by taking into account specific operational components of a project such as rents, operating expenses, and prevailing capitalization rates. Learn more.